1 in 500 children are born with some degree of hearing loss. It is estimated that half these cases of hearing loss have a hereditary basis, some of which due to defects in the development of the inner ear. It is possible that an understanding of the earliest events in ear development may shed light on some causes of hereditary deafness. Our laboratory has chosen to study the earliest events in inner ear development - the transformation of embryonic ectoderm adjacent to the hindbrain into the otic placode, from which the entire inner ear and its associated neurons will ultimately derive. We have previously shown that signals from cranial mesoderm are necessary for otic placode induction, and that at least some of these signals are members of the Fibroblast Growth Factor (FGF) family. We have also shown that only some populations of cranial ectoderm are competent to respond to FGF signaling in this fashion, and that FGF responsiveness correlates with the expression of genes that mark the so-called "pre-placodal" region adjacent to the anterior neural plate from which all craniofacial placodes will derive. Finally, we have shown that Wnt signaling appears to act on cells that have received FGF signaling, and directs them to an otic placode, rather than an epidermal fate. This renewal seeks to build on our previous results by asking how FGF and Wnt signaling activate otic placode genes, how ectoderm cells acquire the competence to respond to FGF signaling, and how transcriptional regulators mediate the choice between otic placode and epidermis. In Specific Aim 1, we will determine whether FGF signaling induces the otic placode through the Ras/MAP kinase signaling pathway. In Specific Aim 2, we will determine whether the competence to respond to FGF signaling in otic placode induction is regulated by the presence of a functional FGF signaling pathway, or by the expression of transcription factors such as Six1, Eya2, Dachl or FoxiS in pre-placodal ectoderm. In Specific Aim 3 we will determine to what degree the Wnt and FGF signaling pathways act synergistically or independently during otic placode induction, and whether Wnt signaling directly represses epidermal fates. Finally, in Specific Aim 4, we will ask whether a novel forkhead family transcription factor, Foxi2, regulates the size of the otic placode by repressing induction of otic placode genes